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Macmillan Corporation has provided the following financial data:

Balance Sheet
December 31, Year 2 and Year 1
	Year 2	Year 1
Assets
Current assets:
Cash	$ 156,000	$ 120,000
Accounts receivable, net	268,000	280,000
Inventory	146,000	130,000
Prepaid expenses	20,000	20,000
Total current assets	590,000	550,000
Plant and equipment, net	732,000	760,000
Total assets	$ 1,322,000	$ 1,310,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$ 175,000	$ 180,000
Accrued liabilities	46,000	50,000
Notes payable, short term	80,000	80,000
Total current liabilities	301,000	310,000
Bonds payable	190,000	190,000
Total liabilities	491,000	500,000
Stockholders' equity:
Common stock, $5 par value	450,000	450,000
Additional paid-in capital	70,000	70,000
Retained earnings	311,000	290,000
Total stockholders' equity	831,000	810,000
Total liabilities & stockholders' equity	$ 1,322,000	$ 1,310,000

Income Statement—Year 2
For the Year Ended December 31, Year 2
Sales (all on account)	$ 1,390,000
Cost of goods sold	830,000
Gross margin	560,000
Operating expenses	500,615
Net operating income	59,385
Interest expense	16,000
Net income before taxes	43,385
Income taxes (35%)	15,185
Net income	$ 28,200

Dividends on common stock during Year 2 totaled $7,200. The market price of common stock at the end of Year 2 was $3.69 per share.

The company’s working capital at the end of Year 2 is:

▸ $732,000

▸ $831,000

▸ $289,000

▸ $590,000

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